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Sony Reveals $2.9 Billion Loss, Unveils Restructuring Plans

According to Reuters and GamesIndustry.biz, Sony has warned that they will post a $2.9 billion annual operating loss, and has taken the first necessary revamping steps that analysts and stockholders have been been clamoring for.

In order to combat the slower economy and the company's first operating loss in 14 years, Sony plans to "beef up" a restructuring plan outlined earlier in January, and this more than doubles a cost-cutting target for the year to March 2010. While the company plans to "keep investing aggressively in strategic fields" (like auto-use batteries, for example), they will also curb investment, close five to six plants and cut a total of 16,000 regular and contract jobs to save 100 billion yen. They will end TV production and design at one plant in Japan, and are forced to reduce the headcount by 30% in operations related to TV design worldwide. As of right now, turning around the LCD TV operations, which is only losing money, is high on Sir Howard Stringer's priority list. Said Stringer:

"We simply have no alternative but to dramatically change the fundamental ways we view our business as well as the way we create, manufacture and distribute our products."

Sony expects these restructuring changes will yield a total of 170 billion yen through March 2010, although some analysts are pressing for more changes. As for the games division, Sony will post an increased loss of $337 million, although there's no report on the exact cause of the loss. Most are simply attributing it to slower-than-anticipated hardware and software sales, which Stringer has already said must be maintained and boosted. Evidently, he continues to battle the old guard at Sony, but for now, the restructuring plans are somewhat in place and will hit TV production hardest.